Australia: Jobs in focus
- The all-important labour force survey headlines the data docket in Australia in the coming week with the NAB business survey also vying for investor attention.
- The week kicks off on Tuesday with weekly data releases including the ANZ-Roy Morgan consumer sentiment index and the ABS payroll jobs and wages data for the second half of March. Payrolls and wages are broadly back at pre-pandemic levels.
- Also on Tuesday, investors and economists will pay close attention to the NAB business survey for March. Business confidence hit an 11-year high in February with conditions the best in 30 months. Capacity utilisation rose to the best level in 18 months. And on business investment, capital spending jumped to its highest level since August 2019. The overall broad-based improvement in business conditions bodes well for both hiring and capital spending intentions – both crucial in the recovery phase.
- On Wednesday, the December quarter data on building activity is released. The number of dwelling starts fell by 0.8 per cent to 42,545 units in the September quarter. The national Homebuilder scheme and various state-based incentives have served to boost approvals to build new houses to record highs. And home renovations are adding to work flows as Australians adjust to the new Covid-19 environment.
- Also on Wednesday, final estimates of overseas arrivals and departures for February are released with the Bureau of Statistics (ABS) Covid-19 household survey. Commentary on the financial situation of Aussie families will be closely observed by economists and policymakers ahead of the JobKeeper expiry at the end of March.
- On Thursday, Commonwealth Bank (CBA) Group economists estimate that Australia added around 45,000 jobs in March with the unemployment rate easing from 5.8 per cent to 5.6 per cent.
- Also on Thursday, data on consumer inflation expectations are released by the Melbourne Institute. In March, surveyed Aussie consumers expected prices to lift 4.1 per cent over the next 12 months.
Overseas: Chinese economic growth and US inflation data the highlights
- In the coming week, Chinese economic growth – as measured by GDP – and US consumer prices data dominate the data docket. But economists will be on the look-out for solid rebounds in both US retail spending and housing activity data after the cold snap in February.
- The week kicks-off on Monday in the US with the release of the monthly budget statement for March. A record budget deficit of US$315 billion is expected. US Treasury Secretary Janet Yellen recently said that it will be “essential” to put the federal budget on a path to sustainability, but reaffirmed that the new Biden government should first defeat the pandemic and make long-term infrastructure investments to help the economy grow.
- On Tuesday in China, international trade data is issued. Exports and imports could respectively rebound by 40 per cent and 24.8 per cent in March on a year ago. A trade surplus of US$52 billion is tipped by economists.
- On Tuesday in the US, weekly chain store sales figures are due with the highly anticipated inflation data and the NFIB small business optimism index. Core consumer prices are expected to have risen by 0.2 per cent in March but the annual growth rate will likely remain well below 2 per cent. The US Federal Reserve has signalled that it is more inclined to allow inflation to run higher than the 2 per cent target before hiking interest rates.
- On Wednesday, weekly mortgage applications data are issued by the Mortgage Bankers Association (MBA) with import and export prices for March. Economists expect that prices lifted by around 1 per cent in the month.
- On Thursday, a flurry of economic indicators are scheduled, including the closely-followed weekly data on jobless claims (claims for unemployment benefits), retail sales, industrial production, business inventories and the NAHB housing market index.
- The retail spending data will be of most interest as the US recovery gains traction. Spending could rebound by 5 per cent in March after a 3 per cent plunge in February due to inclement weather. Sales are expected to jump in the month, fuelled by the jobs recovery and the receipt of stimulus cheques.
- Also on Thursday, the influential New York Empire State and Philadelphia Fed manufacturing indexes for April are due. The ‘Philly Fed’ index surged to its highest level since April 1973 at 51.8 points in March.
- On Friday in China, the usual monthly activity data, including retail sales, industrial production, fixed asset investment, unemployment and new home prices data is accompanied by economic growth or GDP data for the March quarter. Economists expect GDP to expand by 0.5 per cent in the quarter with the annual growth rate surging from 6.5 per cent in the December quarter to a massive 18.2 per cent in the March quarter.
- And on Friday in the US, March housing starts and building permits data are expected to lift after the cold winter blast (which stopped construction activity) and rising borrowing costs weighed on housing activity in February. Residential starts are expected to jump 14 per cent in the month to an annualised rate of 1.62 million units after dropping 10.3 per cent in February. And council building consents could lift 1.6 per cent to an annualised rate of 1.75 million units after plunging 8.8 per cent in February.
Originally published by Ryan Felsman, Senior Economist, CommSec